Drug, surgical equipment prices go north post-GST

Patna: Contrary to the belief that prices of medicine, disposal surgical items and medical equipment would come down after the GST roll-out, all these items have become costlier by 6% to 10%. Sources in this business said the prices of medicines and surgical equipment have increased by 5% to 6% on an average. Most of the medicines, which had 2% to 5.5% VAT, are now charged 12% tax under the GST regime.
Bitthal Saras, a medical and surgical equipment store owner near Patna Medical College and Hospital, said, “The reason behind price hike is the increase in tax under GST. High-end medical equipment, which attracted 12.63% tax earlier, are now taxed at 17.28 %.”
However, rehab products, surgical belts or knee caps have seen some price relaxation as these products with the 6% VAT earlier, are now taxed 5% only. “Weighing machine has been included in the luxury goods and now charged 28% tax under GST. Earlier, it was charged 6% only,” he said.
On prevailing market condition and availability of medicine, Saras said the market was badly affected in July and there was at least 10% decline in business. “In August, with the new stock in place, the market has stabilized a little,” he said.
Ajay Kumar, a medical store owner near Hartali Mor, said, “Most of the medicines and disposable surgical items are under 12% tax slab. In the long run, we expect it will be beneficial for everyone.”
Rajesh Sinha, a drugstore owner on Boring Road, said the market was affected in July when pharmaceutical companies were updating prices and stocks were unavailable. But, in August, with the new stock with updated GST prices, the market has picked up.
Bihar Chemists and Druggists Association (BCDA) president Parsan Kumar Singh believes there is not an extremely adverse effect on the pharmaceutical industry in the state. “The pharmaceutical market in rural areas has been affected, but in the cities like Patna, the business has been smooth. Many medicines are now cheaper by 5% to 7% if one compares to old tax system,” he said and added that the real problem was being faced by unregistered chemists in the rural areas as they are yet to update their stock.
Healthcare leaders expect a trickle-down effect of the new taxation, although healthcare has been exempted from GST.
Ophthalmologist Dr Sunil Kumar Singh said eye treatment has become costly post-GST. “The cost of a lens and implants has seen a hike from 9% to 12% while machines and medical equipment will be taxed 28%, instead of 5%,” he said and added, “Patients are forced to incur the final cost.”
Similar is the case of heart treatment where pacemakers have become costly. “The price of a pacemaker was between Rs50,000 and Rs80,000 earlier. Now, it is something around Rs1.5 lakh. Heart failure therapy, which earlier used to cost around Rs4 lakh to Rs5 lakh, will cost more,” said Dr BP Singh, HoD of cardiology department at IGIMS. Now pacemaker comes under the 18% GST bracket compared to 5.5% tax on it earlier.
For cancer treatment, the cost of equipment for surgery has gone up, but the chemotherapy drug prices have gone down and made affordable, said Dr Manisha Singh, associate director of Mahavir Cancer Sansthan.
Manoj Kumar, who works at a private health facility, said, “For dialysis, we were charging Rs2,000 before GST. Now it is Rs2300,” he said.